Migrating to specialized planning software

NEW YORK — Financial advisers sometimes outgrow relationships — including relationships with software.
And for many advisers, the time has come to say goodbye to spreadsheets and move on to specialized financial planning software.
To be sure, adviser-oriented financial planning software has been used for years. But the expanding number of independent advisers and pressure to increase the productivity of each member of an advisory firm team has hastened the adoption of the specialized software.
Sabrina F. Lowell, an adviser with Mosaic Financial Partners Inc. of San Francisco, said her firm recently shifted from an Excel-based proprietary portfolio management solution.
“It was just too time-consuming to continually update our program for a change, based on tax law or asset values,” Ms. Lowell said.
“It also was difficult to monitor the consistency of output, as individual advisers could go in and change settings themselves,” she said. “With our new program, only an administrator can do that, which ensures consistency.”
Mosaic chose financial planning software from Money Tree Software Ltd. of Corvallis, Ore.
Flexibility required
“We really like — and really need — the flexibility of the program in working with our clients,” said Ms. Lowell, whose firm manages $360 million in assets.
Despite the importance of the tool, the market for adviser-oriented financial planning software is small relative to other products. Based on data collected for a 2005 study by Moss Adams LLP of Seattle conducted for Jersey City, N.J.-based Pershing LLC, the average technology budget among registered investment adviser firms was $17,500.
Multiplying that figure by the 14,000 RIA firms then in existence in the United States, analysts at Moss Adams calculated that advisers spent $245 million on technology.
“Of that total, we can safely say that about $50 million went toward financial planning software,” said Philip Palaveev, a senior consultant at Moss Adams. “We can be certain that has only grown in the two years since.”
Supporting that observation, Edmond J. Walters, founder and chief executive of eMoney Advisor Inc. of Conshohocken, Pa., said his company has grown from a startup in 2000 to having several thousand advisory firms as clients, including six of the 10 largest insurance agencies.

“Firms with independent reps are very entrepreneurial in spirit, and no one was building tools for them,” said Mr. Walters, who added that wirehouses tend to focus much more on systems that allow advisers to sell more products, rather than enhance their ability to serve clients or allow them to answer questions in real time.
Sal Esposito, chairman and chief executive of Tucson, Ariz.-based Finance Logix, a unit of OLTIS Software LLC, said his firm’s software is used by 2,000 financial advisers, 1,500 of whom were added in the last year.
“We go out once a year and take a look at things we haven’t tested before, and that’s how we came across Finance Logix,” said Edward G. Schaider, managing principal of Cambridge Financial Partners Inc. Santa Clara, Calif., an advisory firm with more than $20 million in assets under management.
“We’re still in our first year, but we’ll be staying with it. Finance Logix has an extraordinarily clear user interface that’s very flexible with on-the-fly modeling. When we are sitting with the client, and they ask, ‘Well, what about this?’ we can do it right there with them. It becomes a very fluid and engaging retirement-planning session. We can create hypothetical allocation changes and see how projected changes affect a graphical illustration of the client’s portfolio,” Mr. Schaider said.
Like him, other advisers said they are turning to specialized financial planning software because it enables them to work more collaboratively with clients.

H. Jude Boudreaux, director of financial planning at Bellingrath Wealth Management in New Orleans, said that it was the “sizzle” in eMoney that made the software appealing to the senior partner of his firm, which manages $50 million in assets.
“Two years ago, we needed to find a replacement for the Excel-based spreadsheet system they’d been using, and we discovered eMoney,” he said.
“The first thing we loved about it is that it allows us to give our clients an online website that has all their balances that they hold with us and anything they have outside. The second thing is how it allows us to store secure copies of wills and all other documents in their secure online vault. Safe-deposit boxes tend not to be waterproof,” said Mr. Boudreaux, noting that 90% of the firm’s clients use the system, taking comfort in it especially in light of how the city has suffered from Hurricane Katrina.
He and other advisers point to innovative perks associated with their new software, such as eMoney making its training materials available on iTunes.
To suggest a particular software or service for review, please contact reporter Davis